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Ahold Posts ‘Strong’ Q2

Ahold posted sales of $9.8 billion for its second quarter of 2015, up 17.1 percent from the year-ago. U.S. sales excluding gas were up 2.1 percent for Q2, which the company said reflected an improved customer proposition, and consumer online sales were up 22.8 percent.

"We had a strong quarter and are pleased with the financial performance across our business," said Dick Boer, CEO of Amsterdam-based Ahold. "We grew sales, operating income and net income and delivered strong free cash flow."

Added Boer: "For the fourth consecutive quarter, we grew volume market share in the United States and our margins were resilient, as a result of ongoing cost control."

The Total Picture

Total Q2 net sales of $6.06 billion were up 22.5 percent, although 0.3 percent lower than last year as a result of lower gas sales. Excluding gas, net sales were 2.1 percent higher than last year, while identical sales edged up 1.8 percent.

Q2 saw the completion of the first phase of the company's program to improve its customer proposition, with continued positive performance reported in stores where the program has been in effect for more than a year

Under the program, Ahold is introducing a new produce department format that rolled out to another 92 stores during Q2, bringing the total to 167 stores.

U.S. Growing Volume Market Share, Dollars

As well as growing market share in volume for the fourth consecutive quarter, Ahold USA improved in dollars compared with the year-ago period. Ahold USA's underlying operating margin for the quarter was 3.9 percent, up 0.2 percentage points from last year. The company attributed the improvement to strong cost control and continuing Simplicity cost savings. Lower gas sales had a slightly positive effect on the operating margin, but were more than offset by lower reimbursements on pharmacy products.

During the quarter, Ahold debuted an early-retirement incentive program for Giant Landover store associates, which will be completed by early autumn, and Stop & Shop entered into a conditional agreement to purchase 25 stores in the metro New York area from bankrupt A&P.

"Looking ahead, we remain confident in our outlook for the business and are on track to deliver a full-year performance in line with expectations,” noted Boer. “We are excited about the agreement with Delhaize, which brings together two highly complementary businesses to create a stronger international food retailer for the benefit of our customers, associates and shareholders."

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